Plans to pay a dividend have lifted the TEP Exchange Group share price by 27%.
TEP has to undergo a capital reduction in order to pay the dividend. It has promised an interim dividend of 0.03p a share. Last year, a subscription raised £90,000 at 0.02p a share. These investors were also issued 10 warrants exercisable at 0.002p a share for each share. One of the rules of the warrants is that they can only be exercised when £250,000 has been paid in dividends.
At 0.095p a share, TEP is valued at £810,000. There was £74,000 in the bank at the end of 2011, while the NAV was £23,000.
TEP developed an electronic platform for the trading of endowment policies. This has been licensed to 48.3% shareholder SL Investment Management Ltd. SL pays £230,000 per quarter for the right to develop the platform but it is considering terminating the licence agreement.
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